Chapter 3

Figures converted from Indonesian rupiah (IDR) at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged.

Margin Engine

Metrodata's Solution and Consultation segment is the group's margin engine: roughly a quarter of revenue but about 43% of segment gross profit, at a gross margin near 15% that has held within a narrow band for four years while distribution margins drifted lower [1]. A $388 million order backlog running to 2032, plus recurring cloud, maintenance and managed-services income, gives it a durable base [2]. Its revenue, though, has been broadly flat since 2023.

The look-through economics (Look-Through Earnings) established that this wholly-owned Solutions business supplies the majority of the profit belonging to shareholders. Whether it deserves more than a distributor's multiple depends on what that segment actually is — a durable, moated services franchise, or a value-added reselling layer whose margin is capped and whose growth has stalled. This chapter tests that.

A quarter of the revenue, over 40% of the gross profit

The segment reporting splits Metrodata into two divisions: Distribution (sale of hardware and software) and Solution and Consultation, which the company defines as maintenance to keep systems running, sale of system-level software and serverware, and professional services for consultation, implementation and training [3]. The two earn their living very differently.

In FY2025, Solutions turned $387.9 million of revenue into $57.0 million of gross profit — a 14.7% gross margin — while Distribution needed $1,285.3 million of revenue to produce $76.6 million, a 6.0% margin [1]. So on 23% of segment revenue, Solutions delivered 43% of the combined $133.6 million of segment gross profit. That ratio is not a one-year artefact.

Source: segment notes, FY2023–FY2025 Annual Reports [1] [10] [11].

Across four years the Solutions gross margin sat in a 13.8%–15.0% band, while Distribution drifted from 6.4% toward 6.0% [1] [3] [11]. The stability matters more than the level: a business whose margin holds through a national election year, a post-pandemic PC correction and a weakening rupiah is priced by different mechanics than a hardware reseller passing through principals' price lists [4].

Operating margin tells a more sober version of the same story. Solutions carries heavy people costs — $25.8 million of operating expenses in FY2025, more than Distribution's $22.4 million despite a third of the revenue — so its operating margin was 8.1%, against roughly 4.2% for Distribution [1]. Higher margin, then, but not a light-touch business.

Source: Solution and Consultation segment, FY2023–FY2025 Annual Reports (revenue on total net-revenue basis) [1] [3] [11].

How much of it recurs

A margin that holds is worth more if the revenue behind it repeats. Three disclosures suggest a meaningful part of the Solutions layer does.

The first is the split between revenue booked at a point in time and revenue booked over time. Of $1,630.7 million of FY2025 net revenue, $1,377.4 million was recognised at a point in time — the hardware-and-software pass-through — and $253.2 million, about 15.5%, was recognised over time, the ratable services base [2]. Management attributes the Solutions unit's resilience to exactly this: steady recurring income from maintenance, cloud and managed services, backed by the loyalty of strategic clients in financial services, telecommunications, and oil and gas [5].

The second is the order book. At end-2025 the group carried $388.0 million of unsatisfied performance obligations — contracted revenue not yet delivered — expected to complete anywhere from 2026 out to 2032, up from $382.3 million a year earlier [2]. That backlog is roughly one full year of Solutions revenue already under contract, and its long tail is the signature of multi-year maintenance and managed-services agreements rather than one-off box sales.

The third is deferred revenue. Contract liabilities — cash collected ahead of delivery — rose to $94.1 million from $89.7 million, and $68.4 million of prior-year contract liabilities converted into FY2025 revenue [2]. A growing deferred-revenue balance that reliably unwinds into sales is the working-capital fingerprint of a subscription-and-maintenance book.

Source: FY2025 Annual Report, Note 21 Net Revenue [2].

One more disclosure cuts the concentration worry a value investor would raise: no single customer accounted for more than 10% of net revenue in FY2025 [2]. The recurring base is spread across many enterprise accounts, not hostage to one.

What holds the clients — and what does not

The durable margin has to come from somewhere the customer cannot easily replicate. Metrodata's evidence points to accreditation and embedded systems rather than proprietary technology.

On the enterprise-application side, Metrodata's consulting unit holds SAP Global's Partner Center of Expertise, Application Management Services and Partner Quality Program certifications for products such as SAP All-in-One and SAP Business One [6]. An ERP system, once implemented, sits at the centre of a client's finance and supply-chain operations; the accredited implementer that installed it holds a switching cost measured in operational risk, not just fees. On the infrastructure side, the company positions itself as a primary partner of the three largest global hyperscalers, letting it broker multi-cloud architectures as clients migrate core systems off-premise [4]. Underneath both sits the talent base: Metrodata Academy ran more than 270 training classes for roughly 1,700 participants in 2025, feeding the vendor certifications the model runs on [7].

The eight-pillar portfolio shows where the growth is concentrated. Cloud is the largest revenue contributor, followed by Business Applications; Cybersecurity, Data and AI, and Hybrid IT Infrastructure are the faster-growing but still-small pillars [8]. That mix is squarely aligned with Indonesian enterprise digitalisation, and it is the part of the group a bull is really buying.

The counter-case sits in the same disclosures. The advantage is largely borrowed: cloud revenue is resold hyperscaler capacity and the ERP franchise is built on another vendor's platform, so the margin is capped by what the principals allow. Management says as much — as ERP shifts from on-premise to cloud, "certain services were increasingly handled directly by principals," reshaping the unit's revenue structure and forcing Metrodata to lean on new demand to offset the leakage [4]. The company's own risk register flags that weaker economic conditions delay ICT orders in the Solutions and Consulting business specifically [9].

And the margin is not capital-light. Solutions tied up $360.2 million of segment assets at end-2025 — 46% of the group's segment assets on 23% of revenue — against Distribution's $428.8 million, because long-dated contracts leave receivables and contract assets on the books [1]. Asset turnover of roughly one time revenue is closer to a project-services house than a software licensor.

A durable margin, a stalled top line

The clearest limit on the bull case is growth. After stepping up 23% in 2023, Solutions external revenue was essentially flat for two years — $403.6 million in 2023, $383.6 million in 2024, $387.9 million in 2025 [1] [3] [10]. (The 2024 dip partly reflects a weaker rupiah; in local currency the two years were flat rather than down.)

Source: segment notes, FY2023–FY2025 Annual Reports [1] [10] [11].

That 2025 gain leaned partly on a defensive move: the unit built teams to re-map thousands of dormant accounts and reactivate clients that had not transacted in two to three years, and management credits that reactivation for holding the year's revenue together [4]. Mining an existing base is a sign of a sticky book; it is not organic expansion.

The evidence supports a measured read. The Solutions margin is genuinely durable — a four-year band near 15%, an order book contracted to 2032, a diversified recurring base, and real accreditation-and-switching-cost advantages in ERP and cloud. That is more than a commodity distributor owns, and it is why the segment carries the majority of look-through owner earnings on a minority of revenue. But it is a value-added services layer built on principals' platforms, capital-heavy, margin-capped, and cyclically exposed, and it has not grown for two years. The read that would change is the top line: a return to double-digit Solutions revenue growth — led by the Cybersecurity, Data and AI, and Managed-Services pillars — would argue the market is under-pricing a compounder; another two flat years would say the distributor's multiple is close to right.